- Autonomy Will Cut Into OEM’s Profits
- Study Shows Ride-Sharing Will Cut Into Car Ownership
- Magna Develops Camera-Based Side View Mirror
- GM to Pull Out of South Africa & India
- Volvo to Start Making XC90s in India
- FCA Could Be in Diesel Hot Water

On today’s show… the U.S. Justice Department could crack down on FCA over diesel emissions… autonomous vehicles will put a huge dent in the collision repair business… and General Motors continues its global retreat. All that and more coming right up on Autoline Daily.

This is Autoline Daily the show for enthusiasts of the automotive industry.

FELL ON BLACK DAYS
Autonomous vehicles could dramatically reduce car crashes. That’s great news for just about everybody, but KPMG says self-driving cars will put a big dent in the collision repair business. Last year OEM’s sold $5.6 billion in collision parts. By 2030 that could drop to $2.7 billion and by 2040 it could shrink to $1.4 billion. Not surprisingly this will cut into profits. Even though collision parts account for less than 3% of OEM revenue, on average they make up 10 to 20 percent of operating profits. Based on this, KPMG estimates that automakers operating profits will drop 4 to 9 percent by 2030 and fall 13% by 2040. The researchers say OEMs need to take action now to plan for that drop.

NEVER THE MACHINE FOREVER
And here’s another potential threat to automakers. A study from Capgemini says a good chunk of car buyers see ride-sharing and car hailing as an alternative to owning a car. Researchers surveyed 8,000 people from Brazil, China, France, Germany, India, Italy, the UK and the U.S. and just over a third said sharing is a genuine alternative to buying. Some want both. More than half see ride-sharing and car hailing as complementary to owning a vehicle. The percentages increase with young car buyers and those living in emerging markets. But it’s important for automakers to be involved in these services because two-thirds of respondents said that car brands are an important factor in choosing their car-sharing programs.

Coming up next, Magna has a cool idea to give you better rear view vision.

SEARCHING WITH MY GOOD EYE CLOSED
The supplier company Gentex was the first to come out with a rearview mirror that can double as a video screen. Cadillac was the first brand to offer it. But now the supplier company Magna is taking the technology to outside mirrors. It uses a traditional mirror housing that also houses a video camera. And there is a video screen mounted just inside the A-pillar. The camera pops in and out of the housing to wipe the screen clean if it gets dirty or if it’s raining. Using the video camera provides a much wider field of view than a traditional reflective mirror. Magna found that the video camera mount has to stick out far enough to provide the proper perspective for the driver. And it found that the video screen had to be mounted inside the A-pillar to separate it from the infotainment and navigation screens. Besides, that’s the area where people are used to looking when using their mirrors. The EU and Japan have pending legislation to mandate cameras like this and in the US NHTSA is investigating if it should do it too.

BLOW UP THE OUTSIDE WORLD
General Motors is hyper-focused on boosting profits and only wants to invest in areas where it can make money. It sold off Opel in Europe, it stopped manufacturing cars in Russia and Indonesia, and now it’s adding South Africa to the list. It’s selling its South African operations to Isuzu. By the end of the year GM will also stop selling cars in India. It will continue to make cars there but only for export. GM says that investing in a full line of vehicles in India would be expensive and that it would lose money. Here’s our Autoline Insight. We admire GM’s financial discipline, but there moves could come back to haunt the company. Ford is making record profits in Europe. The Russian car market is starting to make a comeback. And while India’s car market is small it’s expected to grow fast. So we wonder. Would today’s GM have invested in China 20 years ago?

LIVE TO RISE
Speaking of India, Volvo just announced it will start making the XC90 there later this year. It will assemble knock-down kits to keep costs down, and sees huge opportunity in the premium part of the Indian market.

Uh-oh, there’s more problems with diesel emissions. And FCA could be in hot water. That’s coming up next.

BURDEN IN MY HAND
Earlier in the year FCA was accused of failing to notify the EPA of software controls on its diesel engines that allowed them to emit higher emissions under certain operating conditions. It’s not that these software controls are necessarily illegal, it’s just that FCA failed to report them. The automaker and regulators have been in talks for months to resolve the issue, but FCA hasn’t been able to fully explain the purpose of all the functions to their satisfaction. Now Bloomberg reports the Justice Department could sue FCA as soon as next week if they fail to resolve their differences. There are over 100,000 vehicles said to have the cheating software, which could translate to a fine of up to $4.6 billion.

Don’t forget to join us this later this afternoon for Autoline After Hours. Our guest will be Steve Kosowski, who heads up Strategic & Business Intelligence for Kia Motors America.We’ll have the new Kia Niro in the studio and he’ll take us on a deep dive into this hybrid, because Kia took a very different approach to doing a hybrid compared to the Prius. We’ll go live with that show at 3 pm Eastern time.

But that’s it for today, thanks for watching and please join us again tomorrow.

Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com

On the “Burden in my Hand” piece about FCA’s legal woes at the hands of the Justice Department, I am left sighing with my forehead in hand… Why are legislators so narrow-minded with regard to the (small) part the automotive industry plays in air pollution? It sounds to me as though they do not ‘want’ to accept whatever justification FCA is giving for the software controls. If the controls don’t do anything illegal, why are they facing a $4bil+ fine? Am I missing something here, or is our society is simply too darn litigious?

@MJB – Here’s my take. Some software controls that allow diesels to emit higher emissions under certain operating conditions are legal. From my understanding, if there’s a condition that would cause harm to an engine, a software control can be written to make sure the engine will last. This is normally under heavy load and for short bursts. But not all software controls are legal and automakers have to make authorities aware of any they have. FCA did not tell the EPA of its controls and now it seems that they’re having a difficult time explaining why they’re not illegal.

I’ve read in a few places this all had to do with the performance of the engines, but, in my opinion, this is not about performance in the normal sense. FCA’s diesels in question are not very peppy, but are pretty fuel efficient. I think it has more to do with fuel economy.

But FCA did not tell the EPA of its software controls and right off the bat that seems like it’s hiding something. Which is maybe why you said, “It sounds to me as though they do not ‘want’ to accept whatever justification FCA is giving for the software controls.”

@Miad & XA351GT – I’m glad a few people have picked up on the references. Soundgarden definitely played a roll in my life growing up and I wanted to do something without directly addressing it. Miad, along the lines of your post, I’m not sure many people noticed or really cared. I will never forget when the music video (remember when those were a big deal?) for Black Hole Sun came out. I had never seen anything like it. I am also a fan of Audio Slave and Cornell is a talent that will be missed.

The image in the video screen did not appear to contain much more than the side mirror showed. Compared to a simple mirror, this system will add significant cost to a vehicle for negligible benefit to the owner. Mirrors may not be something stylists love, but this seems to be a case of fixing something that isn’t broken.

I have become accustomed and rely on the blind side alert that is currently in my outside rear-view mirrors, do I need a camera too; don’t think so. The more they add cameras there’s a point when you have too much to look at and don’t look forward, you know. where the biggest threats occur (and if not the biggest threats, the threats that require the most immediate attention).

And as I said yesterday about diesel emissions; unless they are clearly illegal, treat them as water under the bridge, move on and get it right (from now on). Fines of over four billions for something that is best arbitrary and argumentative; ridiculous. And all the litigation, wastes money and time and also panders to the lawyers (pocketbook).

5, 6, 7
Vehicle emissions are the biggest contributor to “bad air” in many urban areas. Yes, in rural Kansas, smoke spewing worn out 1950′s cars would not be a big problem, but in big cities, “cheater” diesels are a problem, if there are very many of them.

Having experience with the Bolt EV’s rear view camera/mirror, makes me less than enthusiastic for the side view cameras. The reason is purely optics. When you look into a mirror that reflects the image from a distance, you don’t need to change your focus. But you do with a camera.

It’s like driving down the road and quickly looking at a map in your lap. You can’t see both in focus at the same time. But you can with a mirror.

I’ve gotta say, Brett, I still crane my head all the way around to back into a parking space, garage, or anything else. I really only use my backup cam to see when I’m about to hit my trailer hitch on a high curb. I just can’t bring myself to trusting only what I see in that on that screen.

Now, my kids (when they get that age) may learn to back up on the camera. And for them it may seem unnatural to physically turn their heads around. Call me a creature of habit I guess…

The main purpose of “back up” camera is not to navigate while backing up (although it is handy when hooking up a trailer), the primary purpose is safety so you don’t back over a kid who may be in the blind spot directly behind the vehicle.